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Convercent in Wired: Startup...

Convercent in Wired: Startup Offers to Lay Off Entire Staff In Name Of Software Revolution

Wired Magazine:

RJ Owen had a bad feeling about this meeting.

It was a Monday afternoon, a couple weeks ago, and Owen — a product manager and design lead with Denver-based software company Convercent — had been called into a company-wide meeting with co-founder and CEO Patrick Quinlan. Quinlan began by saying that by the end of the meeting, every employee was going to have to make a choice. Owen rolled his eyes. He figured they’d all be asked to step forward and affirm their allegiance to the company mission — maybe even write their names on the wall as way of professing their love for the job at hand. He hated that sort of thing.

Over the next two hours Quinlan — a former U.S. Army Airborne Infantryman — outlined the state of the company and delivered a profanity-laden pep talk that did little dispel Owen’s fears that he was in for a cheesy team-building exercise. But then Quinlan picked up a stack of envelops. "Inside each envelop is a two-month severance check,” he told the room. "If this is not the job you want, if you don’t wake up in the morning to walk into this room to build a better company, go cash it.”

Convercent builds corporate governance and compliance software — applications that help companies make sure their employees follow internal policies and don’t break the law. Among tech startups, compliance software rates pretty low on the sex-appeal scale. But like so many other outfits, Convercent is trying to bring some zazz to an old software market through "consumerization,” spicing things up with Facebook-like interfaces and slick mobile apps. The difference is that the company has a CEO who will bet his entire staff in the name of this software revolution.

When Quinlan pulled out the checks, Owen was surprised, but he was still skeptical. He braced himself for the worst. Maybe everyone would tear up their checks in unison while chanting a slogan. But that didn’t happen. Instead, Quinlan told everyone that the soonest they could give an answer was the next day at noon. Quinlan encouraged everyone to go home, talk it over with their families, and make a decision. They had until the end of the day on Wednesday to make up their minds.

He said he would support any employee’s decision to leave, and provide a positive reference. "If you really want to be a life guard in San Diego, go do it,” he told the workers. "This may be the last time any one pays you to do what you want to do.”

RJ Owen didn’t know what he was going to do. But he liked what he heard. "I was excited that they were taking people seriously,” he says.

Much like Workday and Box.com and so many other new-age enterprise companies, Quinlan believes Convercent can take on the software old guard. He hopes the company’s software can not only make it easier for companies to understand and follow the law, but to enforce higher values. Many companies now have values and standards that are more strict than the law, he says. That may sound overly idealistic, but the guy is willing to put his severance checks where his mouth is.

He got the idea the idea from military groups like the Airborne Infantry and the Special Forces. "One of the reasons people are in those elite groups is that they want to be around other people who are elite,” he says.

Patrick Quinlan. Photo: Convercent

The point, he says, was give his employees a real choice. And to do that, he had to give them real financial freedom to leave. He thought every one of his employees could find a job in a month or less, but he decided to offer two months severance for good measure.

There was a snow storm the day after the meeting. When Quinlan arrived for work, the parking lot was nearly empty. His heart sank. Typically, the lot was almost full by the time he pulled in. But over the course of the day, people trickled in. No one had quit yet. They were just delayed by the snow storm.

By the end of the day Wednesday, everyone had made their decision. No one accepted the severance. Everyone stayed. "I was surprised,” Quinlan says. "I thought at least a few people would take it.”

Owen says he thought hard about the offer. In addition to being a designer, he has experience as a programmer and an MBA degree. He doesn’t think it would have been tough to find another job. But it was the chance to leave that made him decide to stay. "Where else could I work that they would take people so seriously?” Owen asks. "If they hadn’t done it, I’m not sure I would feel so strongly.”